3. 3
IT investments
page 8
4
IT priorities
page 12
Ernst & Young
7
An Initiative of CIO Association
About CIOKlub
page 35
8
About
Ernst & Young
page 36
Enterprise IT trends and investment 2013
1
4. Forew
Shirish Gariba
Prakash Pawar
Radhakrishna Pillai
President, CIO KLUB
Survey Coordinator
Survey Coordinator
CIO KLUB
The CIO KLUB, an initiative of the CIO Association, is one of the largest
associations of Chief Information Officers (CIOs) in India. The Enterprise
IT Trends and Investment Survey was initiated by the CIO KLUB in 2009 in
association with Ernst & Young LLP (EYLLP). As we enter the fifth year of
existence of the KLUB, it gives us immense pleasure to present the fifth annual
survey report titled Enterprise IT trends and investment. This year, we have
garnered a more representative response from all over India. At the same
time, we have taken all possible confidentiality measures for the member
responses, which were only accessed by the Ernst & Young LLP team for the
aggregate survey analysis.
The objective of this survey is to provide insights on technology investment
priorities to CIOs. We hope that CIOs will find the findings of the survey
useful and use it as a tool to compare their respective sectors’ technology
deployment trends, enabling them to keep their businesses ahead of times. We
are sure that this survey will also serve as a benchmark for CIOs to internally
justify the technology investment in their organizations. We hope that the
survey proves to be valuable to the product vendors, system integrators and
professional services firms so that they may understand this community’s IT
spend plans for FY13-14.
Ernst & Young LLP, our knowledge partner, has assisted the CIO KLUB
to prepare the relevant questionnaire, collate responses and analyze the
responses. Being an independent professional services firm with wide
experience in advisory, Ernst & Young LLP was uniquely positioned to provide
this assistance. Undoubtedly, the CIO KLUB-EYLLP Enterprise IT trends and
investment survey will be a useful and reliable document in the world of Indian
Enterprise IT trends and investments.
We are glad to see the overwhelming participation of KLUB members. We
hereby express our sincerest thanks to all the members for their support. We
also express our sincere gratitude to the team from Ernst & Young LLP, which
2 Customer-centric on this initiative for the last three months.
has been working IT
5. word
Samiron Ghoshal
Terry Thomas
Devendra Parulekar
Advisory Partner & IT
Advisory Leader
(India), Ernst & Young
Advisory Partner & IT Risk
and Assurance Leader,
(India), Ernst & Young
Partner - Advisory
Services,
Ernst & Young
Ernst & Young LLP (EYLLP)
The survey results show a drive to improve the customer’s satisfaction
and increase IT’s visibility within the enterprise. However, concerns over
policy and regulatory uncertainty, exchange rate volatility, rising costs and
protectionist tendencies of the Government continue to affect the overall
sentiment. This reflects in the IT spend plan for FY13-14. The conservative
approach of the last three years continues in IT budgets this year.
The trend of enhancing customer experience and investing in technologies
that allow businesses to be cost-effective and efficient is likely to continue
in FY13-14. However, investments in the IT sector are not expected to be
largely different than the previous years, after accounting for inflation and
rising costs.
We are excited to present the results of the Enterprise IT Trends and
Investment Survey 2013, insights into various IT initiatives taken by the
CIOs and the proposed investment plans. It is our privilege to be associated
with the CIO KLUB as knowledge partners for this survey. This survey aims
to capture key IT priorities and initiatives taken by companies across various
sectors. It also captures investment patterns, and their variations from
previous years.
We would like to extend our warmest thanks to all participating CIOs for
taking out time to share their views on IT investments and priorities. We
are confident that you will find the survey report an interesting knowledge
resource. We hope that it will be a valuable resource available to IT
professionals and companies to understand the trends in India. We thank the
CIO KLUB for providing us an opportunity to be a part of this, and reiterate
our commitment to work together and jointly publish this report every year.
Enterprise IT trends and investment 2013
3
6. Introduction – customer centric IT
Improving the bottom line is the
key focus of the CIOs in FY13-14
The current uncertainties about the policy and regulatory
environment, and rising costs have made business leaders
cautious in their investment plans. This has been reflected in the
uncertainty in the priorities of the CIOs, as shown in our survey.
IT spend increase will be restricted to address inflation and
rising costs.
It is interesting to note how the CIOs’ priorities have changed
to reflect changes in economic health indicators in the last
five years of the survey. In 2009, cost reduction was a priority
because the markets were declining sharply. In 2010, the mood
was cautiously optimistic, with visible growth in the year to
come. In 2011, in spite of slow down, the mood was optimistic
and organizations planned to make large investments in IT.
However, due to continued uncertain economic environment, the
focus in 2012 shifted to create a lean, agile and resilient
IT function.
Figure 1: India’s gross domestic product growth rate, as compared
to the same quarter of the previous year (seasonally adjusted)
GDP Growth Rate
14
12
10
8
6
4
2
Sep-12
Dec-12
Jun-12
Mar-12
Sep-11
Dec-11
Jun-11
Mar-11
Sep-10
Dec-10
Jun-10
Dec-09
Mar-10
Sep-09
Jun-09
Mar-09
Sep-08
Dec-08
Jun-08
Mar-08
0
Source - Organization for Economic Co-operation and Development - statistical profile
of India (www.oced.org/india, accessed 15 April 2013)
This year the focus has shifted outward, and CIOs are looking at
IT from the point of view of their businesses. This year’s survey
has revealed that in FY13–14, CIOs are primarily focusing on
improving the margins and the bottom line.
The global business community echoes this sentiment.
Ernst & Young’s research with 641 senior executives in over
20 countries reveals risks and opportunities according to their
importance for business. We have listed some of these risks and
opportunities for companies based on their relevance to IT.
4
Customer-centric IT
7. Figure 2: An extract of risks and opportunities in 2013 (based on
their relevance to IT)
Top Risks
Top Opportunities
Pricing pressure
Innovation in products, services and operations
Cost cutting and profit pressure
Emerging market growth
Macroeconomic risk
Investing in process, tools and training to achieve
greater productivity
Regulation and compliance risks
Investing in IT
Emerging technologies
Improving execution of strategy across business
functions
Political shocks
Global optimization and relocation of key functions
Source: Business Pulse – Exploring dual perspectives on the top 10 risks and opportunities in 2013
and beyond. Ernst & young report in collaboration with Oxford Analytica
To address the risk around cost and price pressures and opportunities of market
growth, in FY 13-14, the CIOs will focus on:
•
•
•
I
“
T will address
the risk around
cost and price
pressures as well
as the opportunities
of market growth by
enhancing customer
experience and
creating opportunities
to improve operational
efficiencies.
Assisting a business in enhancing its customer experience by investing in
customer-centric technologies to aid its growth
Creating opportunities for internal customers and business stakeholders to
improve operational efficiencies and be cost-effective
IT-enabling the business operations by investing in various collaborative and
transactional systems
Figure 3: Key focus areas for FY13–14
Enable business growth
Enhance customer experience
Secure operating
environment
Leverage information for
decision making
Build resiliency
in IT
Enable business processes
Improve profitability
The survey also highlights some interesting facts. In FY12–13 it had predicted a
cautiously optimistic outlook for CIOs. However, a number of priorities indicated by
CIOs for FY12–13 were deferred, and these have been now reflected as priorities
for FY13–14. CIOs are expected to take up business continuity and information
security initiatives in the current year. Both these priorities have been consistent
features of our survey for the last four years.
Enterprise IT trends and investment 2013
5
8. Key findings and trends for 2013–14
The results of our survey indicate the following top priorities for CIOs for the year
2013–14:
•
Being customer-centric and enhancing customer experience
•
Transforming IT and automating business processes
•
Building resilient IT to ensure business continuity
•
Investing in enterprise mobility
•
Investing in business intelligence to leverage information for decision making
•
Securing the IT environment by investing in information security technologies
Apart from these priorities, the following broad trends have emerged for FY13-14:
•
•
•
•
•
•
•
•
6
Customer-centric IT
Median spend on IT as a percentage of revenue is 1.08 for manufacturing
sectors and 3 for services sectors, such as banking and financial services,
and technology.
Innovation is expected to continue to drive capital investments. 81% of the
respondents have confirmed this fact.
IT spend is likely to remain consistent, as compared to prior years, and no
major budget increase is anticipated.
Balance of power is shifting to customers, as consumerizaton of technology
gains momentum. CIOs are expected to work toward enhancing customer
experience. Customer-centricity is closely linked to customer relationship
management, social media and enterprise mobility.
Cloud computing is likely to enable organizations to bridge the gap between
consumerization of technology, high customer/ employee expectations and the
existing enterprise app world.
The priority of business continuity has shifted toward smaller organizations
with revenues less than INR10 billion.
CIOs are likely to focus on enabling business processes and establishing
efficient and effective business operations to improve profitability.
Business intelligence, analytics, budgeting, planning, consolidation,
business workflows and mobile-based applications are likely to drive the IT
enablement agenda.
9. •
•
•
•
•
CEO/ Board-level cockpit view of the business is likely to drive mobility
evolution. Focus is expected to be to leverage information from unstructured
data. Social media analytics is likely to gain momentum.
Mobile Device Management (MDM) and Bring Your Own Device (BYOD) policies
are likely to be the most important risk management measures.
Protection from internal threats is expected to drive information security
investments. Biometrics and other information security technologies used for
protection against hacking have seen investments in the previous years, and
have not found favor with respondent CIOs in the current year.
Lack of an organization-wide data strategy, dashboards’ definitions, and
supporting tools and technologies are major challenges that CIOs are
expected to address in the current year to effectively leverage information for
decision making.
Majority of the IT functions continue to be performed in-house.
Survey questionnaire and analysis
The questions were designed to capture key aspects of IT priorities and
sought very specific and objective responses from the participating
CIOs. Questions were targeted at two broad areas e.g., IT budgets and
investments, and technology trends for the coming year. The questions
covered areas, such as key priorities for 2013–14, and investment
rationale and spends on IT people, process, and technology. The survey
also attempted to address aspects of the current IT operating model and
the CIOs’ plans on enhancing the IT-enablement of business processes.
Enterprise IT trends and investment 2013
Though 276 responses were received, only 180 completed responses 7
have been considered for the analysis. Partial responses were excluded
from the analysis.
10. IT investments
IT spend allocation
Spend on IT as a percentage of revenue has largely remained
consistent, as compared to previous years. The overall
spend on IT for manufacturing sectors (such as chemicals,
pharmaceuticals and life sciences, retail, consumer products,
manufacturing, metals and mining) has a median value of 1.08%
of the revenue. For services sectors (such as technology, banking
and financial services, telecommunications) the median spend on
IT is 3% of revenue.
Figure 4: Median IT spend as a percentage of revenue
Manufacturing Services
sectors
1.08
3.0
0
1
2
3
4
5
6
7
8
9
10
Interestingly, the size of the organization did not have much of
an impact on the spend percentages. This has been consistent
across the size of the organizations of the survey respondents.
Innovation continues to drive
capital investments
Innovative solutions that give businesses a competitive edge
have been a driving factor for IT for the last couple of years.
The survey reveals the adoption of such solutions by the
respondent CIOs in formulating their FY13-14 budgets. Along
with innovation, ability to enhance customer experience has
been another influencing factor that has helped respondent CIOs
shape their IT budgets.
8
Customer-centric IT
11. Figure 5: Factors influencing IT budgets
0%
20%
40%
60%
80%
100%
Innovation
Agility of IT
Customer-centricity
Risk mitigation
Ability of IT to quickly respond to business requirements is the single most
influential factor for companies with revenues less than INR10 billion. Companies
with revenues more than INR50 billion focus more on risk mitigation. Innovation
and customer-centricity are common factors driving IT budgets in companies of
all sizes.
Sectoral view
•
•
•
•
•
Automotive sector respondents are likely to focus more on agility than on
customer-centricity.
The banking and financial services sector is expected to use risk mitigation as a
primary driver for budget formulation.
The infrastructure sector is expected to focus entirely on agility and quicker
response in order to shape its budget.
Retail, consumer products, real estate and construction, and pharmaceutical
and life sciences sectors are likely to have a very high focus on innovation. Risk
mitigation is likely to play a smaller role in determining investment priorities
for the current year.
The technology sector is expected to concentrate equally on agility and
innovation in order to determine investment priorities for the current year.
Enterprise IT trends and investment 2013
9
12. IT investment is expected to largely remain
constant, as compared to previous years
The current cautious business outlook has also impacted overall IT spend, which is
expected to be similar to the previous year. Any increase is likely to be mainly due
to inflationary increase in costs. The survey has revealed that the majority of the
capex (capital expenditure) increase will be among companies with revenues less
than INR50 billion. Companies with revenues more than INR50 billion are expected
to witness similar capex as the previous year.
Figure 6: IT spend trend in the previous year
60%
50%
40%
30%
20%
10%
0%
Likely to increase over 20%
Likely to increase up to 20%
Same or constant
People
IT Services
Communication costs
Hardware costs
Software costs
Licenses
-20%
Capital investments
-10%
Likely to decrease up to 20%
Likely to decrease over 20%
Sectoral view
•
•
10 Customer-centric IT
The automotive sector is not expected to witness high capital expenditure. 47%
of the respondents from this sector expect the capex to decrease, as compared
to the previous year. 33% expect it to remain constant.
Similarly, the chemicals sector is also not expected to witness any increase in
capital expenditure. 67% of the respondents from this sector expect the capex
to be similar to the previous year, while 33% believe that it may decrease.
13. •
•
Technology, infrastructure and manufacturing sectors are expected to
witness an increase in capital expenditure. However, businesses as usual
costs are likely to largely remain consistent with the prior years.
The real estate and construction sector is expected to witness overall spend
that was similar to the previous years.
Minority report
While most of the CIOs have voted to keep the IT spend similar to the previous
year, respondents from some of the sectors have a different point of view. For
instance, banking and financial services sector respondents expect increase in
capital as well as ‘business as usual’ spend.
Similarly, pharmaceuticals and life sciences sector respondents have
overwhelmingly voted to increase the capital and operational expenditure. 83%
of the respondents have cited an increase in capital expenditure and 67% of the
respondents have cited an increase in operational expenditure. In the previous
year, this sector had adopted a very cautious approach.
B
“
anking and
financial
services,
pharmaceuticals
and life sciences sectors
will witness an increase
in capital expenditure
and business as usual IT
spend.
Enterprise IT trends and investment 2013 11
14. IT priorities
The results of our survey indicate the following top priorities of
the CIOs for the year 2013–14:
•
•
•
•
•
•
Being customer-centric and enhancing customer experience
by providing customers with easy and effective interface to
collaborate with the business
Transforming IT and enabling business processes to create
efficient and effective business operations
Building resiliency in IT to ensure business continuity
Investing in enterprise mobility to provide flexibility to
business personnel in executing business processes
Investing in business intelligence to leverage structured and
unstructured information for decision making
Securing the IT environment by investing in information
security technologies to protect the organization from
internal or external threats.
Figure 7: Top IT priorities for the year 2013–14
0%
Customer-centricity
Improving IT function and
process effectiveness
Business continuity
Enterprise mobility
Business intelligence
Information security
Cloud computing
Analytics
Enterprise IT architecture
Social media
Outsourcing
IT governance
Others
12 Customer-centric IT
10% 20% 30% 40% 50% 60% 70%
15. Though CIOs have indicated an overwhelming response for customer-centricity, i.e.,
enhancing customer experience and enabling business processes, certain specific
sectors have shown inclination toward other priorities, such as cloud, social media
and enterprise IT architecture.
Banking and
financial
services
Chemicals
Infrastructure
Pharmaceuticals
and life sciences
Manufacturing
Real estate and
construction
Retail and
consumer
croducts
Technology
Others
Sector respondents in percentage
Automotive
Overall
Figure 8: The top IT priorities for FY 2013–14 by sector
8.33%
13.89%
3.33%
2.78%
6.67%
24.44%
3.89%
4.44%
16.67%
15.56%
Customer centricity
IT transformation
Business continuity
Enterprise mobility
Business intelligence
Information security
Cloud computing
Analytics
Enterprise IT architecture
Social media
Outsourcing
IT governance
First priority
Second priority
Third priority
Fourth priority
Fifth priority
Minority report
Majority of CIOs across sectors have identified consistent priorities. However,
certain sectors have identified specific priorities. For instance, banking and
financial services respondents do not believe transforming IT and enabling business
processes to be a key priority for FY 13–14, considering the relative maturity of IT
in this sector.
Furthermore, the automotive sector respondents have identified social media as
a priority and are likely to leverage social media analytics to understand customer
behavior and outpace the competition. Respondents from the retail and consumer
products sector are expected to use social media for recruitment, acquiring new
customers and brand recognition. These respondents also believe that cloud
provides an apt solution to deploy customer-centric and employee life cycle
applications. The manufacturing sector is also expected to focus on cloud solutions
to deploy customer-centric and vendor collaboration applications.
Enterprise IT trends and investment 2013 13
16. B
“
The infrastructure sector respondents are likely to focus on cloud for deploying IT
alance of
solutions as the respondents from this sector believe that cloud will help reduce
hardware costs and optimize initial capital investments. The technology sector is
power is
also likely to evaluate cloud in order to deploy customer-centric applications.
shifting to
Infrastructure sector respondents are also expected to focus on outsourcing as a
mechanism to gain access to skilled resources. Technology sector respondents are
customers
likely to focus on enterprise IT architecture in order to rationalize the IT systems
portfolio and standardize IT services.
as consumerization
of technology gains
Customer-centric IT: enhancing customer
momentum. CIOs will
work toward enhancing experience and enabling business processes
customer experience. Balance of power is shifting to customers as consumerizaton of technology gains
momentum. CIOs will work toward enhancing customer experience.
Customer-centricity has been an overwhelming choice of participant CIOs as their
first priority for FY13–14. All respondents across company sizes and sectors
recognize this as a key priority. Respondents are expected to focus on enhancing
customer experience with the organization — better user interface, quicker
response, minimum time and maximum touch points for customers to interact
with the organization.
Figure 9: Percent of respondents across sectors citing customer-centric
applications as a priority
100%
80%
60%
40%
20%
14 Customer-centric IT
Others
Technology
Retail and
consumer products
Real estate and
construction
Manufacturing
Pharmaceuticals
and life sciences
Infrastructure
Chemicals
Banking and
financial services
Automotive
0%
17. CIOs are expected to focus on enabling business processes and establishing
efficient and effective business operations to improve profitability
While CIOs generally focus on helping businesses improve the top line, current
economic uncertainty has also led CIOs to look within and help businesses improve
their bottom line. Improving effectiveness of the IT function mainly to enhance
the experience of internal customers and IT-enable their requirements is another
important agenda that is expected to occupy the CIOs’ mindshares. This has been
on participant CIOs’ minds for the last three years. However, the focus is greater
this year, with 52% of the respondents citing this as a priority, as compared to
42% in the previous year. Focus on improving IT is consistent across the size of the
organizations and sectors.
Figure 10: Percent of respondents across sectors citing “improving IT
function and process-effectiveness” as a priority
C
“
IOs are
expected
to focus on
enabling
business processes
and establishing
efficient and effective
business operations to
improve profitability.
100%
80%
60%
40%
20%
Others
Technology
Retail and
consumer products
Real estate and
construction
Manufacturing
Pharmaceuticals
and life sciences
Infrastructure
Chemicals
Banking and
financial services
Automotive
0%
Enabling business processes is one key priority for respondents to help improve
operational efficiencies. BI/DW/ Analytics, budgeting, planning and consolidation,
business and IT workflows, and mobile based applications are expected to drive the
overall IT-enablement agenda.
Enterprise IT trends and investment 2013 15
18. Focus on customer-centricity is closely linked with
customer relationship management, social media
and enterprise mobility.
Banking financial
services
Chemicals
Infrastructure
Pharmaceuticals
and life sciences
Manufacturing
Real estate and
construction
Retail and
consumer products
Technology
8.33%
Overall
Sector respondents in percentage
Automotive
Figure 11: IT-enablement focus for FY13–14
13.89%
3.33%
2.78%
6.67%
24.44%
3.89%
4.44%
16.67%
B2B applications
B2C applications
BI/DW/Analytics
Budgeting, planning and
consolidation
Workflows
Customer relationship
management
eGovernance, risk and compliance
Employee life cycle/HR
Employee self service portals
ERP
Mobile applications
Sector specific applications
Supply chain management
Respondents from the automotive sector expect to focus on customer relationship
management (CRM) and governance, risk and compliance (eGRC). However, they do
not have plans to implement or evaluate mobile applications. This sector’s focus on
CRM has emerged due to the current slowdown and focus of the organizations to
retain existing customers and attract new ones. This sector also has mature supply
chain management (SCM) processes.
Banking and financial services sector respondents are likely to focus on CRM as well
as eGRC. Use of eGRC solutions is expected to be mainly in order to supplement
the risk management and compliance initiatives in this highly regulated sector.
Respondents from the chemicals sector are expected to consider business-tobusiness (B2B) applications for collaborating better with vendors and customers,
and focusing on enhancing supply chain capabilities. Apart from B2B, infrastructure
16 Customer-centric IT
19. sector respondents are expected to focus on ERP and enabling employee life cycle
(HR) processes. Respondents from the pharmaceutical and life sciences sector are
likely to evaluate workflows as well as sector-specific applications and consider GRC
applications for better risk and compliance management in response to strict legal
and regulatory requirements.
Respondents from the manufacturing sector are likely to consider SCM to improve
supply chain and CRM to attract and retain customers. Focus of real estate and
construction sector respondents is expected to be mainly on enabling employee life
cycle processes and core business processes, and enabling employees to interact
using self-service portals. Retail and consumer products sector respondents are
expected to focus on CRM and sector-specific applications. Finally, respondents
from the technology sector are likely to focus on improving current enablement
levels of employee life cycle processes.
B
“
usiness
continuity
as a priority
has shifted to
smaller organizations
that have revenues
below INR10 billion.
Business continuity: build resiliency
to continue business operations during
disruptions
Priority balance has shifted in favor of smaller organizations that have revenues
below INR10 billion.
Business continuity is one of the top five priorities for the CIOs. It has remained
in their priority list since the inception of the survey. Larger organizations, with
revenues greater than INR10 billion, have developed these continuity processes
over the years and the priority balance has now shifted in the favor of organizations
with revenues below INR10 billion. As compared to 55 % of respondent in 2012,
70% of the respondents from smaller organizations have cited business continuity
as a priority this year.
Figure 12: Percent of respondents across size of the organizations citing
”business continuity” as a priority
0%
10%
20%
30%
40%
50%
60%
70%
80%
< 5 billion
5 billion - 10 billion
10 billion - 50 billion
50 billion - 100 billion
> 100 billion
Enterprise IT trends and investment 2013 17
20. Chemicals, pharmaceuticals and life science sector respondents have identified
business continuity as one of their most important initiatives. As compared to
35% of the respondents of the previous year, 80% of the respondents from the
pharmaceuticals and life sciences sector have identified business continuity as a
key priority this year. Stricter regulatory requirements, focus on supply chain and
an intention of building resiliency are key drivers for this sector to opt for business
continuity.
Automotive sector respondents have continued to focus on business continuity. 53%
of the respondents have identified business continuity as a priority, as compared to
71% respondents in the previous year. A number of companies have taken business
continuity initiatives in the previous year and that is the main reason for the drop
in the number of respondents (52% in the current year, as compared to 71% in the
previous year, overall) citing this as a priority.
Respondents from the retail and consumer products sector have recognized business
continuity as their priority, and 60% of the respondents have confirmed this.
Figure 13: Percent of respondents across sectors citing ”business
continuity” as their priority
100%
80%
60%
40%
20%
Others
Technology
Retail and
consumer products
Real estate and
construction
Manufacturing
Pharmaceuticals
and life sciences
Infrastructure
Chemicals
Banking and
financial services
Automotive
0%
Respondents from the technology, real estate and construction sectors have not
identified business continuity as their priority. The technology sector has evolved
and matured in business continuity programs mainly on account of managing
customer expectations. Real estate and construction sector has decreased its focus
on business continuity this year (25% of the respondents), as compared to the
previous year (57% of the respondents). Rising construction costs and high level of
inventory have driven this sector to focus more on its bottom line.
Effective business continuity management (BCM) has remained one of the top
priorities on the corporate agenda. Big disasters and smaller disruptions have
prompted leading executives to prepare for the worst by investing in effective
business continuity management (BCM), with information security measures
playing a key role.
18 Customer-centric IT
21. Enterprise mobility: using mobile computing
to enhance collaboration
The CEO cockpit view of the business is expected to drive mobility evolution.
Enterprise mobility indicates a paradigm shift in the work habits of employees,
where employees bring their own mobile device (BYOD) with corporate data
available to them at any time and at any place. It is one of the key priorities for CIOs
in FY13–14 and it is consistent across sectors.
T
“
he CEO cockpit
view of the
business is
expected
to drive mobility
evolution.
Figure 14: Percent of respondents across sectors citing ”enterprise mobility”
as a priority
80%
60%
40%
20%
Others
Technology
Retail and
consumer products
Real estate and
construction
Manufacturing
Pharmaceuticals and
life sciences
Infrastructure
Chemicals
Banking and
financial services
Automotive
0%
Enterprise mobility has been around for some time in the form of e-mail and
collaboration tools. Currently, around 87% of the respondents are using this use
case of enterprise mobility. Mobile applications deployment is expected to gain
momentum in FY20–14. 62% of respondents are likely to implement, upgrade or
evaluate mobile applications in the coming year.
Enterprise IT trends and investment 2013 19
22. Figure 15: The status of mobile applications across sectors
No response
9%
Currently using
20%
No intention to use
8%
Under evaluation
25%
Implementation
planned for FY13-14
31%
Upgrade planned for FY13-14
7%
More than 50% of the respondents have stated that their organizations have
deployed CRM, sales force automation and video conferencing on mobile platforms.
In FY13–14 key mobility deployments are expected to be seen for business
intelligence dashboards, board level reporting, documentation management and
sales force automation.
Figure 16: Percent of respondents planning to deploy mobility
0%
Business intelligence dashboards
CEO and Board-level reporting
Document management
Sales force automation
CRM
HR application/workflows
Enterprise telephony
20 Customer-centric IT
20%
40%
60%
80%
23. Mobile device management and BYOD policies are expected to be the most
important risk management measures.
More than 35% of the respondents, who have either implemented or are
evaluating enterprise mobility with BYOD, are expected to consider mobile device
management (MDM) and network access control (NAC) technologies to protect
corporate data and mitigate the risk of unauthorized disclosure. Key technologies
that are to be considered to manage risks to corporate data due to enterprise
mobility deployment in FY13–14 are:
•
•
Implementing MDM to secure, monitor or manage mobile device deployments
Implementing NAC to manage mobile device connectivity to corporate
networks
•
Implementing stricter information security policies around using BYOD
•
M
“
obile device
management
and BYOD
policies are
expected to be the
most important risk
management measures.
Logging and monitoring mobile data usage
•
Implementing endpoint malware protection to secure devices from malware
threats
Figure 17: Top five BYOD end point risk management measures
0%
10%
20%
30%
40%
50%
Mobile device management
Network access control
BYOD policies
Logging and monitoring
Endpoint malware protections
Enterprise IT trends and investment 2013 21
24. However, more than 40% of the respondents believe that the flexibility or
productivity gains using BYOD will come at a cost — device security, application
security and backend integration costs will increase.
Figure 18: Percent of respondents citing increase or decrease in IT spend
due to BYOD
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Device security
costs
Application
security costs
Likely to increase
Not relevant
Mobile device
Back-end
management integration costs
costs
Same or constant
No response
Likely to decrease
Implementing BI dashboards on mobile devices has been acknowledged by more
than 60% of the respondents and this use-case is consistent across sectors.
However, respondents from pharmaceuticals and life sciences, and retail and
consumer products sectors have cited implementing employee life cycle workflows
as a quick-win initiative. Similarly, focus of using mobility for sales force automation
and CRM is stronger in the banking and financial services, as compared to the
other sectors.
Overall, 25% of the respondents across sectors do not intend to use BYOD. In case
of the real estate and construction sector, two-third of the respondents are not
expected to take BYOD initiatives.
Enterprise mobility will evolve over the next few years and organizations will
expand mobility capabilities beyond e-mail and collaboration tools. Enterprise
mobility will also play a key role in enhancing the customer (internal as well as
external) experience. Organizations will also explore ways to secure corporate
data residing in mobile devices, and solutions, such as MDM, will play a key role in
enhancing security.
22 Customer-centric IT
25. Business Intelligence: leverage
information for decision-making
Business intelligence (BI) has been a consistent priority of all for the last four
years. Number of respondents citing this priority has increased from 40% in the
previous year to 51% in the current year. Business intelligence as a priority has
been consistent across the size of the organizations.
Business intelligence enables business leaders to leverage information for
decision-making and finding fact-based answers to specific questions. These
fact-based answers are expected to be a key focus of BI implementation in
current as well as subsequent years. Our interactions with select CIOs reveal
that organizations strive to evaluate economic implications of actions, adjust
to changing business environment, assess effectiveness of product or service
launches, and identify and predict key business events and risks in a
proactive manner.
Figure 19: Percent of respondents across sectors citing “business intelligence”
as their priority
80%
60%
40%
20%
Others
Technology
Retail and
consumer products
Real estate and
construction
Manufacturing
Pharmaceuticals and
life sciences
Infrastructure
Chemicals
Banking and
financial services
Automotive
0%
The survey also reveals that 43% of the respondents are expected to implement,
upgrade or evaluate BI/DW/ Analytic applications during the current year.
Enterprise IT trends and investment 2013 23
26. Figure 20: Percent of respondents that plan to implement or evaluate BI
in FY13–14
No response
8%
No intention to use
8%
Under evaluation
9%
Currently using
41%
Upgrade planned for FY 13-14
7%
Implementation planned for FY 13-14
27%
Though organizations are striving to attain maximum gain out of BI, a number of
challenges have impacted the effectiveness of BI in meeting expectations. Key
challenges, as cited by the respondents, are — lack of an organization-wide data
strategy, lack of dashboard definitions and inadequate deployment of tools and
technologies in order to meet the expectations.
Respondents from the retail and consumer products sector have not identified
business intelligence as their sectoral priority, though 38% of the respondents from
this sector are expected to upgrade their existing BI platforms. Effective BI is pivotal
to the success of this sector, and 28% of the respondents have already implemented
BI solutions. However, respondents from this sector have identified social media as
a key priority. Social media analytics and Big Data are expected to drive the BI and
analytics agenda of this sector. Respondents from the chemicals and technology
sectors have not identified business intelligence as their key priority.
Social media analytics
Respondent CIOs across sectors are expected to start focusing on social media
analytics to mine customer sentiment. In the years to come, social media is likely to
play a pivotal role for organizations to understand the customer behavior.
BI dashboards and enterprise mobility
Deploying BI reports and dashboards on mobile devices for ease of access is
another key element of using BI for effective decision-making. More than 60% of
the respondents have stated that they will either implement or evaluate enterprise
mobility for BI dashboards in FY13–14. Similarly, 49% of the respondents are
expected to attempt to provide CEO and Board-level reports on mobile devices.
24 Customer-centric IT
27. Making sense of unstructured data
Organizations are evaluating multiple options to make business intelligence and
analytics relevant and leverage the information across multiple internal sources
within the organization and external sources, including the web. Our interactions
with CIOs have revealed the following focus areas:
•
•
•
•
•
•
Social media analytics: This includes leveraging social media to identify
customers, obtaining feedback regarding the products and services, and also
tracking the effectiveness of campaigns. Furthermore, it also includes using
this media to find out market potential and product positioning.
Big data: Big data includes gaining competitive advantage out of a large
volume of both structured and unstructured data from across different
applications and data sources (internal and external), with an ability to acquire
data faster and ensure speedier processing.
Advanced predictive analytics and prescriptive analytics: This includes using
statistical modeling techniques to simulate and predict business outcome
based on the defined constraints.
M
“
aking
sense of
unstructured
data,
predictive analytics,
in-memory analytics,
big data and social
media analytics will be
key BI initiatives for
FY13-14.
In-memory analytics: This includes enabling the user to process large volume
of data at a very high speed as it stores and processes complex data processing
rules within the main memory.
Self-service BI: This includes designing and deploying a BI solution wherein
end-users may perform analytics without involving technology or other
support teams.
Cloud and analytics as a service: This includes creating BI and analytics
capability by leveraging infrastructure provided by the third party.
Information Security: protect corporate
data from internal and external threats
Information security continues to remain a priority in the CIOs’ list. Irrespective
of the size of the organizations, respondents continue to recognize the need to
safeguard assets and secure data and information. It is interesting to note that
information security has been gradually moved downward in the priority list. In
2009 and 2010, information security was voted as the second most important
priority for CIOs. Since then, it has moved downward, but continues to feature in
priority list. CIOs have cited a couple of reasons for this:
•
•
Rationalization of IT budgets has led to deferment of planned investments
in security
Though organizations have matured information security programs, upcoming
technology trends, such as cloud, social media and enterprise mobility
continue to challenge these programs
Enterprise IT trends and investment 2013 25
28. The chemicals sector leads the information security bandwagon this year, and 66%
of the respondents from this sector identified information security as their priority,
as compared to 14% of the respondents citing security as their priority in the
previous year’s survey. Most of the other sectors have been consistent in identifying
security as their priority over the years.
Respondents from the retail and consumer products sector have preferred to focus
on social media, cloud and enterprise mobility. However, they do not intend to
invest in information security. Only 25% of the respondents from this sector have
identified security as a priority. Information security may gain momentum in this
sector when cloud, social media and mobility deployments gain maturity.
Figure 21: Percent of respondents across sectors citing ”information security”
as their priority
80%
60%
40%
20%
Others
Technology
Retail and
consumer products
Real estate and
construction
Manufacturing
Pharmaceuticals and
life sciences
Infrastructure
Chemicals
Banking and
financial services
Automotive
0%
Key information security initiatives that are expected to be taken by organizations
in the coming year are:
•
D
ata leakage prevention (DLP)
►
•
D
igital/Information rights management (IRM)
►
•
S
ecurity information and event management (SIEM)
►
•
S
ingle sign on (SSO)
►
Banking and financial services are expected to focus on identity and access
management (IAM) to manage access across multiple and diverse applications
prevalent in this sector. Information security has matured over the years and
the basic building blocks such as firewall, end point security and intrusion
detection/ prevention systems have been in use for a while. More than 65% of
the respondents from this sector have cited existing use of these technologies.
Among other technologies, network access control and biometrics are not likely
to witness major investments in the coming year.
26 Customer-centric IT
29. Protection from internal threats are likely to drive
information security investments
The survey reveals that organizations have already taken steps to address
external threats, such as hacking. Firewalls, IDS, content filtering, vulnerabilities
management technologies are not in contention for FY13–14. Similarly, biometrics
has not found favor among respondent CIOs.
The information security investment focus for FY13–14 is expected to be on the
following:
•
Data leakage prevention to protect sensitive data
•
Information rights management to restrict access to sensitive data
•
•
Security information and event management (SIEM) to log and monitor
corporate data access
Single sign-on for managing access to IT systems
Real estate and
constuction
2.78%
6.67%
24.44%
3.89%
4.44%
Technology
Manufacturing
3.33%
Retail and
consumer products
Pharmaceuticals
and life science
Banking and
financial service
13.89%
Infrastructure
8.33%
Chemicals
Sector respondents in percentage
Automotive
Overall
Figure 22: Information security focus technologies for FY13–14
16.67%
Internal threats
Data leakage prevention (DLP)
Disk encryption
End point security
Identity and access management
(IAM)
Information rights management
Multi-factor authentication
Network access control
Privileged access management
Security information and event
management (SIEM)
Single sign-on
External threats
Firewalls
IDS/IPS
Vulnerability management
technologies
eGRC
Biometrics
Content filtering/inspection
Enterprise IT trends and investment 2013 27
30. I
“
nformation security Data leakage prevention (DLP)
Respondents across sectors are expected to focus on DLP technologies to address
investments
the information leakage concerns. Current deployment of DLP is low in most
sectors. However, focus on DLP is likely to be more in organizations with revenues
FY13-14 are
greater than INR10 billion, as compared to smaller organizations.
oriented toward
reducing data
Information rights management (IRM)
risk posed by the
IRM, used to restrict access and usage of electronic content, is likely to witness
increased focus. This focus is evident in the organizations with revenues greater
consumerization of
than INR10 billion. Though only 17% of the respondents have cited using IRM, 43%
of the respondents are expected to implement or evaluate deployment of IRM. It is
technology in the
no surprise that focus on IRM is largely in the automotive, pharmaceuticals and life
enterprise.
sciences sectors as organizations in these sectors make substantial investment in
research and development. More than 75% of the respondents from these sectors
are likely to evaluate IRM in the current year.
Security information and event management (SIEM)
SIEM, a tool used for centralize storage and interpretation of logs, is one of the
top security priorities for the current year. Respondents from the automotive,
pharmaceuticals and life sciences and technology sectors are likely to lead the SIEM
implementation in the current year.
Single sign on (SSO)
SSO has been another talking point for CIOs over the last few years. While single
sign on is expected to reduce administrative overhead or password fatigue, it also
calls for increased focus on protection of user credentials. Banking and financial
services, chemicals, manufacturing, and pharmaceuticals and life sciences sectors
are expected to focus more on SSO this year.
28 Customer-centric IT
31. Looking ahead
Cloud computing
Cloud is expected to bridge the
gap between consumerization of
technology, balance of power in hands
of consumers and the traditional
enterprise app world.
More and more businesses are moving into a virtual world,
supported by new technologies and driven by a need to lower
their IT infrastructure and administrative costs and adopt a
flexible and scalable model for IT. While adoptions of cloud
services have gained impetus, the progress is still slow. This is
not surprising, as the number of risks and challenges identified
by respondents have remained fairly consistent over the years.
Data security and lack of control in the IT environment are
the key concerns of CIOs. Like any transformational initiative,
adoption of cloud also faces internal resistance as turning over
control of the security of their IT infrastructure and data is an
inherently uncomfortable situation for any senior corporate
manager. Another decisive factor for the slow progress of
cloud computing, as cited by CIOs, is increased bandwidth
and network costs that compensate for savings in internal
infrastructure costs.
Figure 23: What will drive cloud adoption in FY13–14?
0%
20%
40%
60%
80%
Scalability/flexibility
Lower infrastructure costs
Lower staffing/administrative costs
Access to skills and competencies
Frequent software updates
Enterprise IT trends and investment 2013 29
32. Sector view of cloud services provides interesting viewpoints. The adoption of
cloud solution for hosting e-mail services and customer-centric applications top
the list, with respondent from across the sector suggesting usage of cloud services
for these services. Respondents from the automotive, infrastructure, banking and
financial services sectors have suggested adoption of cloud for employee selfservice workflows (travel, expense, etc.). Cloud-based disaster recovery is another
use case that respondents are expected to evaluate this year. The analysis of the
survey highlights the fact that respondents across the sectors are still apprehensive
to adopt cloud for core business applications, such as Enterprise Resource Planning
(ERP) or Human Resource Management System (HRMS).
Ernst & Young LLP believes that cloud services will finally take off in the near
future because of technology advances, particularly ubiquitous high-speed
internet connectivity, the ever decreasing cost of storage and maturity in the cloud
governance model.
Figure 24: Potential cloud adoption opportunities in order of preference
Preference
Solution
01
E-mail
02
Customer-centric applications
03
Disaster recovery
04
HRMS/ employee life cycle
05
Vendor collaboration applications
06
Employee self service portals and workflows
07
Business intelligence and analytics
08
Intranet
09
Core ERP applications
Social media analytics
Social media is a rapidly evolving platform that shares and amplifies individual
opinion and can create strategic opportunities or unforeseen risks for companies.
As its popularity grows, organizations are becoming increasingly aware of the
importance of social media insight while making critical decisions or avoiding
significant pitfalls.
While organizations face the challenge of maintaining control of their identity, they
also struggle with incorporating meaningful opinions into their decision making
and risk management processes. This can be achieved by means of social media
analytics, which is the practice of gathering data from blogs and social media
websites and analyzing that data to make business decisions. The most common
use of social media analytics is to mine customer sentiment to support marketing
30 Customer-centric IT
33. and customer service activities. Typical objectives include of social media
analytics include increasing revenues, reducing customer service costs, getting
feedback on products and services, and improving public opinion of a particular
product or services.
Respondents across the sectors have expressed very similar sentiments on
social media analytics. The potential driver for social media analytics identified
by most of the respondents includes creating brand recognition, understanding
the customer behavior and acquiring new customers. The need for social media
analytics has been gaining prominence across sectors. However, it is interesting
to note that the infrastructure sector leads the pack in this respect. Respondents
from this sector have suggested the use of social media analytics to understand
customer requirements and behavior protect oneself against risk and reorganize
the brand. The survey also reveals that respondents from the pharmaceuticals
and life sciences sector have been evaluating social media analytics in order to
monitor adverse events, while respondents from the retail and consumer products
sector have been using social media analytics to recruit staff.
C
“
onsumerization
of technology
and technologysavvy customers
are expected to make
social media analytics
a cornerstone of the
organizations’ business
intelligence and analytics
efforts.
Figure 25: Potential drivers for social media analytics
Preference
Drivers for social media
01
Brand recognition
02
Understanding customer behavior
03
Acquiring new customers
04
Understanding the customer requirements
05
Efficient and effective recruitment
06
Protecting against risks
07
Outpacing the competition
08
Educating the customers
09
Monitoring adverse events
Enterprise IT trends and investment 2013 31
34. A note on outsourcing
Outsourcing
Outsourcing has been an alternative many respondents have chosen to gain access
to skilled resources and improve operational efficiencies. However the survey
reveals that respondents still largely prefer to retain majority of their IT functions
in-house, with the exception of audits, which require skilled manpower and is
mostly outsourced.
Figure 26: The status of outsourcing
0%
10% 20% 30% 40% 50% 60% 70% 80%
Application development
Application maintenance
Database administration
End user support
Data center operations / Server support
Network operations
Security operations
Security audits
Software testing or quality assurance
Currently in-house
32 Customer-centric IT
Currently outsourced
35. Survey approach and analysis
Approach
Ernst & Young LLP and CIOKLUB’s fifth Enterprise IT Trends and
Investment Survey, brought to you by Ernst & Young LLP on
behalf of the CIOKLUB, gauges the current investment patterns,
IT priorities and upcoming investment plans of the companies.
This year’s survey was conducted from 25 February 2013 to
18 March 2013. More than 260 CIOs from various companies
across major industries participated in the survey.
The questionnaire used in this survey was designed to gather
relevant information about IT investments, initiatives, priorities
and technologies domains.
This survey was conducted through a secure online tool with
a specific URL that was mailed to designated members of the
CIOKLUB, along with instructions for completing the survey.
Personal interviews were conducted with a few CIOs to obtain
their response and perspective on IT initiatives.
Ernst & Young LLP downloaded the results of the survey to
conduct an analysis and used cross tabs to identify the patterns
of various IT domains across specific industries, and the size and
type of industry. Responses of 180 out of the 260 respondents,
who completed the survey were considered as complete and
used for the analysis. Partial responses have been ignored for
the purpose of this analysis.
Enterprise IT trends and investment 2013 33
36. Profiles of 2013 survey participants
Figure 27: Survey participants by sector
0%
10%
20%
30%
Automotive
Banking and financial services
Chemicals
Government, public sector and non-profit
Infrastructure
Pharmaceuticals and life sciences
Manufacturing
Metals and mining
Media and entertainment
Professional services
Real estate and construction
Retail and consumer products
Technology
Telecommunications
Transportation and logistics
Utilities
Others
Figure 28: Survey participants by size of the organization (in INR)
0%
< 5 billion
5 billion - 10 billion
10 billion - 50 billion
50 billion - 100 billion
> 100 billion
No response
34 Customer-centric IT
5%
10%
15%
20%
25%
30%
35%
37. About CIO KLUB
CIOs of Indian enterprises have formed the CIO KLUB, which is
registered under the name of CIO Association. CIO Association (CIO
KLUB) is a non-profit organization and the largest association of
chief information officers in India. The CIO KLUB is governed by a
Governing Body and a National Executive Council, and each chapter
has a managing committee to oversee the CIO KLUB objective on a
national level.
Being true to its DNA, CIO KLUB touches all aspects of the life
of CIOs.
Vilas Pujari
Secretary, CIO KLUB
N Natarajan
President, CIO KLUB Bengaluru Chapter
CIO KLUB has grown truly national with six working chapters in
India’s most strategic cities (Mumbai, Delhi, Bangalore, Pune,
Chennai and Coimbatore). From a humble beginning in Mumbai
on 25 April 2008 with less than 30 members, it has now grown to
have 950 members across India.
The key objectives of the of the KLUB are to share experience,
enhance knowledge and explore business solutions by leveraging
the collective wisdom of a large number of CIOs, who are registered
members of the Klub, and senior technology executives of the
country. The current registered members represent manufacturing,
BFSI, Service, Pharma and Healthcare, Retail, Real Estate &
Construction sectors from India’s leading business houses and
PSUs covering a wide spectrum of Indian businesses. With such
leadership as members, CIO KLUB is uniquely positioned to be the
voice of the community of IT users in the country. We have formed
various working groups, including one to especially interact with
the Government in order to support the Government initiative of
deploying information technology in Government projects. This is a
social initiative of CIO KLUB, where it offers the services of a large
number of experienced CIOs, who have implemented various IT
projects in private enterprises.
The CIO KLUB is unique in providing an interactive platform for
vendors, media and CIOs so that they may exchange best practices
and ideas and formulate strategies to address common IT issues.
The KLUB’s objective is to share and enhance knowledge. In order
to achieve these, CIO KLUB organizes various knowledge-sharing
sessions across the country.
The primary objective of these sessions is to increase the business
benefits of the organizations of member CIOs and also to help
them grow as effective leaders in their professional lives. The KLUB
also encourages entrepreneurial spirit by providing a platform for
sharing and generating innovative ideas in the larger interest of
the community.
Amol Vidwans
President, CIO KLUB Chennai Chapter
O A Balasubramaniam
President, CIO KLUB Coimbatore Chapter
Col Ramesh Wahi
President, CIO KLUB Delhi Chapter
Subramaniam
President, CIO KLUB Mumbai Chapter
For more information about CIO KLUB, please visit
www.cioklub.com or email us at cioklub@cioklub.com.
Yogesh Zope
President, CIO KLUB Pune Chapter
Enterprise IT trends and investment 2013 35
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